Q2 2024 Glacier Bancorp Inc Earnings Call
Good day and thank you for standing by and welcome to Glacier Bancorp's second quarter earning conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone.
Operator: second quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.
Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. Now I'd like to hand the conference over to your speaker today, Randy Chesla, president and CEO of Glacier Bancorp. Please go ahead. All right.
You will then hear an automated message advising your hand is raised.
To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.
Randy Chesler: Now I'd like to hand the conference over to your speaker today, Randy Chesler, President and CEO of Glacier Bancorp. Please go ahead.
Randy Chesla: All right, thank you Justin and good morning, and thank you for joining us today. With me here in Kalispell this morning is Ron Cofer, chief financial officer; Byron Pollen, our treasurer; Tom Dolan, our chief credit administrator; Don Sherry, our chief administrative officer; and joining us on the phone is Angela Dosey, our chief accounting officer. I'd like to point out that the discussion today is subject to the same forward The positive trends that were evident in our first quarter came into sharper focus in the second quarter.
Randy Chesler: All right. Thank you, Justin, and good morning, and thank you for joining us today.
Speaker Change: With me here in Kalispell this morning is Ron Cofer, Chief Financial Officer. Byron Pollin, our Treasurer. Tom Dolan, our Chief Credit Administrator. Don Sherry, our Chief Administrative Officer. And joining us on the phone is Angela Dossi, our Chief Accounting Officer.
Speaker Change: I'd like to point out that the discussion today is subject to the same forward-looking considerations starting on page 13 of our press release, and we encourage you to review this section.
Speaker Change: The positive trends that were evident in our first quarter came into sharper focus in the second quarter.
Randy Chesla: We had strong EPS growth for the quarter, driven by lower non-interest and credit loss expense. Net income was $44.7 million for the quarter, which increased $12.1 million, or 37% from the prior quarter. Net interest margin grew 9 basis points from 2.59% in the prior quarter to 2.68%; net interest income ended the quarter at $166.5 million, which was flat compared to the prior quarter. This was driven by a decrease in interest income of $5.6 million in the quarter, primarily due to using cash, which we deposited at the Fed and earned 5.4% on, to pay down borrowings at the end of the prior quarter, which drove a decrease in interest We expect to see net interest income growth in the third and fourth quarters and into 2025.
Speaker Change: We had strong EPS growth for the quarter, driven by lower non-interest and credit loss expense. Net income was $44.7 million for the quarter, which increased $12.1 million, or 37% from the prior quarter.
Speaker Change: Net interest margin grew 9 basis points from 2.59% in the prior quarter to 2.68%.
Speaker Change: Net interest income ended the quarter at $166.5 million, which was flat compared to the prior quarter.
Speaker Change: This was driven by a decrease in interest income of $5.6 million in the quarter, primarily due to using cash, which we deposited the Fed and earned 5.4% on, to pay down borrowings at the end of the prior quarter.
Speaker Change: which drove a decrease in interest expense of $5.6 million.
Speaker Change: We expect to see net interest income growth in the third and fourth quarters and into 2025.
Randy Chesla: The loan yield for the current quarter was 5.58%. It increased 12 basis points from 5.46% in the prior quarter and increased 46 basis points from the prior year's second quarter. Our total cost of funding in the quarter, including non-interest-bearing deposits, decreased four basis points from the prior quarter to a total cost of funding of 180 basis points, driven by a reduction in borrowing. Core deposit funding costs increased two basis points, ending the quarter at 136 basis points; borrowing costs increased 14 basis points, but the average borrowing balance decreased by $735 million, which is why interest expense decreased for the quarter.
Speaker Change: The loan yield for the current quarter was 5.58 percent.
Speaker Change: It increased 12 basis points from 5.46% in the prior quarter, and increased 46 basis points from the prior year's second quarter.
Speaker Change: Our total cost of funding in the quarter, including non-interest bearing deposits, decreased four basis points from the prior quarter to a total cost of funding of 180 basis points, driven by our reduction in borrowings.
Speaker Change: Core deposit funding costs increased two basis points, ending the quarter at 136 basis points.
Speaker Change: Borrowing costs increased 14 basis points, but the average borrowing balance decreased by $735 million, which is why interest expense decreased for the quarter.
Randy Chesla: We were pleased to see non-interest-bearing deposits of $6 billion increase $38.4 billion, or 3% annualized, during the quarter. While core deposits of $20 billion were down versus the prior quarter, excluding the Wheatland acquisition, they were essentially flat to the prior year's second quarter. For provision expense, we reserve $3.5 million in the quarter, which includes $5.1 million of credit loss expense and $1.6 million of credit loss benefit from the unfunded loan commitments reserved. We kept the percentage of provision to loans basically flat to the last quarter at 1.19%. Our credit performance continued to be very stable.
Speaker Change: We were pleased to see non-interest-bearing deposits of $6 billion increase $38.4 million
Speaker Change: or 3% annualized during the quarter.
Speaker Change: While core deposits of $20 billion were down versus the prior quarter, excluding the Wheatland acquisition, they were essentially flat to the prior year's second quarter.
Speaker Change: For provision expense, we reserve $3.5 million in the quarter, which includes $5.1 million of credit loss expense and $1.6 million of credit loss benefit from the unfunded loan commitments reserve.
Speaker Change: We kept the percentage of provision to loans essentially flat for the last quarter at 1.19%.
Randy Chesla: Non-performing assets to bank assets and net charge-offs to average loans performed very well. Early-stage delinquencies decreased $12.7 million from the prior quarter. Early-stage delinquencies of $49.7 million as a percentage of loans were 0.29%, versus 3.37% in the prior quarter.
Speaker Change: Our credit performance continued to be very stable. Non-performing assets, the bank assets, and net charge-offs to average loans performed very well.
Speaker Change: Early-stage delinquencies decreased $12.7 million from the prior quarter.
Speaker Change: Early-stage delinquencies of $49.7 million as a percentage of loans were 0.29% versus 0.37% in the prior quarter.
Randy Chesla: Non-interest expense ended the quarter at $141 million, down $10.9 million or 7% versus the prior quarter, primarily due to a reduction in regulatory assessments, acquisition-related expenses, and expenses associated with tax credit investments. Additionally, we had one-time branch building sale gains of 1.9 million in the quarter that reduced our expenses. Non-interest income for the quarter was $32.2 million, reflecting a good pickup at the beginning of the summer, including increases in both service charges and gain on sale of residential loans.
Speaker Change: Non-interest expense ended the quarter at $141 million, down $10.9 million or 7% versus the prior quarter.
Speaker Change: primarily due to a reduction in regulatory assessments, acquisition related expenses, and expenses associated with tax credit investments.
Speaker Change: Additionally, we had one-time branch building sale gains of $1.9 million in the quarter that reduced our expenses.
Speaker Change: Non-interest income for the quarter was $32.2 million, reflecting a good pickup at the beginning of the summer, including increases in both service charges and gain on sale of residential loans.
Randy Chesla: The loan portfolio of $16.9 billion increased $119.03 million annualized during the quarter, reflecting continued, steady, disciplined growth. Stockholders' equity of $3.1 billion increased $26.7 million, or 1%, during the current quarter and increased $211 million, or 7%, over the prior year second quarter. We also declared a quarterly dividend of $0.33 per share.
Speaker Change: The loan portfolio of $16.9 billion increased $119.03 million annualized during the quarter, reflecting continued, steady, disciplined growth.
Speaker Change: Stockholders' equity of $3.1 billion increased $26.7 million, or 1% during the current quarter, and increased $211 million, or 7%, over the prior year's second quarter.
Speaker Change: We also declared a quarterly dividend of $0.33 per share. The company has declared 157 consecutive quarterly dividends and has increased the dividend.
Randy Chesla: The company has declared 157 consecutive quarterly dividends and has increased the dividends 49 times. In mid-February, we announced a purchase and assumption agreement with Heartland Bank, who had decided to exit the Montana market. We purchased six Montana branches of its Rocky Mountain Bank Division, including the deposits, loans, owned real estate, and fixed assets associated with the branch. As I previously noted, it is a rare opportunity to purchase six branches of a well-running franchise in good markets where we already have divisional branch leadership and a good knowledge of the customer.
Speaker Change: 49 times.
Speaker Change: In mid-February, we announced a purchase and assumption agreement with Heartland Bank, who had decided to exit the Montana market.
Speaker Change: We purchased six Montana branches of its Rocky Mountain Bank Division, including the deposits, loans, owned real estate, and fixed assets associated with the branches.
Speaker Change: As I previously noted, it is a rare opportunity to purchase six branches of a well-running franchise in good markets where we already have divisional branch leadership and a good knowledge of the customers.
Speaker Change: This transaction includes high-quality deposits and loans and a great team of employees, too.
Speaker Change: We expect to close this transaction at the end of the day today.
Speaker Change: and convert these branches to glacier systems over this weekend.
Speaker Change: We welcome our new Rocky Mountain Bank teammates and their customers to Glacier Bancorp.
Randy Chesla: This transaction includes high-quality deposits and loans and a great team of employees, too. We expect to close this transaction at the end of the day today and convert these branches to glacier systems over this weekend. We welcome our new Rocky Mountain Bank teammates and their customers to Glacier Bancorp. So that ends my formal remarks. And I would now like Justin to open the line for any questions that our analysts may have. And thank you.
Speaker Change: Bye-bye.
Speaker Change: So, that ends my formal remarks, and I would now like Justin to open the line for any questions that our analysts may have. And thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.
Operator: And thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question comes from Matthew Clark on Piper Zandler. Your line is now open.
Speaker Change: To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster and one moment for our first question
Speaker Change: And our first question comes from Matthew Clark from Piper Zandler. Your line is now open.
Matthew Clark: Hey, good morning everyone. Morning, um, first one for me, just on the Heartland loans and deposits that are coming over this evening. Can you just update us on those balances?
Matthew Clark: Hey, good morning everyone. Morning.
Matthew Clark: [inaudible]
Speaker Change: First one for me, just on the Heartland loans and deposits that are coming over this evening, can you just update us on those balances?
Randy Chesla: Sure. Ron, do you want to go through what we just are totaling up the numbers today? So I believe where we ended up were $403 million in deposits, and loans were finally.
Speaker Change: Sure. Ron, do you want to go through what the, we just are totaling up the numbers today.
Ron: So, I believe where we ended up were $403 million in deposits.
Ron Cofer: About 280 million 280 million in loans.
Ron: and loans run were finally about 280 million 280 million in loans
Matthew Clark: And then just on the... The accretion that's expected to come through, I think it was assumed to be 17 million over five years previously. Any update to that number? Yeah, it did.
Ron: Okay.
Ron: Got it.
Speaker Change: The accretion that's expected to come through, I think it was assumed to be $17 million over five years previously. Any update to that number? Yeah, it just, current estimate is $16 million, still over five years.
Ron Cofer: Yeah, it just estimates the current estimate is 16 million still over five years, still very positive.
Matthew Clark: And then on the deposit costs... The increase, which is good to see. I guess what's your outlook for the kind of upcoming quarter. Do you feel like you can stabilize here? Do you feel like you might trickle a little higher, or have you started to trim deposit rates?
Speaker Change: I'm very positive.
Speaker Change: Okay.
Speaker Change: And then on the deposit costs, the increase slowed here.
Speaker Change: Which is good to see. I guess, what's your outlook for kind of the upcoming quarter? Do you feel like you can stabilize here? Do you feel like you might trick a little higher? Or have you started to trim deposit rates?
Byron Pollen: Yeah, Matthew, this is Byron. I can address that. Yeah, we did have a lot of success and continue to stabilize our deposit costs. I think we can hold that. So from here, we do continue to test customer acceptance of lower rates, and we are having some success in some cases. We still see a little bit of rate migration, so that's kind of a headwind there. But overall, I think we will be able to continue to see cost stabilization in our overall total deposit cost.
Byron: Yeah, Matthew, this is Byron. I can address that. Yeah, we did have a lot of success and continue to stabilize our deposit costs. I think we can hold that.
Speaker Change: So, from here, we do continue to test customer acceptance of lower rates. We are having some success in some cases. We still see a little bit of rate migration, so that's kind of a headwind there. But overall, I think we will be able to continue to see cost stabilization in our overall total deposit costs. Thank you. Thank you.
Matthew Clark: Okay, and then just any update on the 3% NIM guide for 4Q that still holds true?
Speaker Change: Okay and then just any update on the 3% NIM guide for 4Q that still hold true?
Byron Pollen: Yeah, in terms of margin, you know, I think the same drivers we've discussed before are still there. You know, we're pretty much in the same place.
Speaker Change: Yeah, in terms of margin, you know, I think the same drivers we've discussed before are still there, you know, we're pretty much in the same place. We have very strong dynamics, including asset repricing momentum.
Byron Pollen: We have very strong dynamics, including asset repricing momentum that is still there. On top of that, you know, we have the Rocky Mountain branch acquisition that, as Randy said, settles today, so that will provide some boost. So, you know, as we go through the year, we are expecting to see growth. And, you know, as we exit the year, I do think we'll be in the neighborhood of 3%.
Speaker Change: that is still there. On top of that, we have the Rocky Mountain branch acquisition that, as Randy said, settles today, so that will provide some boost. So, as we go through the year, we are expecting to see growth.
Randy Chesler: and as we exit the year, I do think we'll be in the neighborhood of 3%.
Matthew Clark: Okay, and then just on security securities repricing. I think you have a bigger slug that reprices next year. Can you just quantify that amount and when that occurs, and what yield that's at?
Speaker Change: Okay, and then just on security, security's repricing.
Speaker Change: I think you have a bigger slug that reprices next year. Can you just quantify that amount, when that occurs, and what yield that's at?
Byron Pollen: Yeah, we do have some chunkier treasury securities that will mature beginning in the fourth quarter of next year, somewhere in the neighborhood of $250 million. I don't have a yield for you on that, but consider them to be low.
Speaker Change: Yeah, we do have some chunkier Treasury securities that will mature, beginning really in the fourth quarter of next year.
Speaker Change: somewhere in the neighborhood of 250 million dollars. I don't have a yield for you on that, but consider them to be low.
Matthew Clark: Yep. Okay.
Matthew Clark: And then just on expenses, some moving parts there this quarter, the branch, sale gain. I think there was a refund on FDIC insurance relative to your prior estimate. You've got the merger charges and then the performance comp adjustment. Seems like the adjusted run rate, maybe going forward, or at least, you know, when you normalize it for this quarter, is around 143.4 million. Any updated thoughts on the run rate guidance here in 3 and 4Q? Yeah, we're Ron here.
Speaker Change: Okay, and then just on expenses, some moving parts there this quarter, the branch
Speaker Change: sale gain. I think there was a refund on FEIC insurance relative to your prior estimate. You've got the merger charges and then the performance comp adjustment. Seems like the
Speaker Change: The adjusted run rate, maybe going forward, or at least, you know, when you normalize it for this quarter is around 143.4 million.
Speaker Change: Any updated thoughts on the run rate guidance here in 3 and 4Q?
Ron Cofer: Yeah, we're Ron and Matthew here. Matthew, let me just take our audience to how we got there. So we had $141 million in the second quarter. If you subtract out the merger-related expenses of $1.8 million, but then add back what you mentioned, we have the gain on the sale of the former branch of $1.9 million. The FDIC, we accrued $1.5 million in Q1, but we got $500,000 left.
Speaker Change: Ron here. Matthew, let me just take our audience through.
Ron: I would get there. So we had $141 million in the second quarter.
Speaker Change: If you subtract out the merger-related expenses of $1.8, but then add back what you mentioned, we have the gain on the sale of the former branch, $1.9 million. The FDIC, we accrued $1.5 million in Q1.
Ron Cofer: So we're adding back 500,000 there and then the reduction in the performance-based compensation by 1.8 million. It added up to about 143.4 million, which is, you know, at the low end of what I previously guided 144 to 146. So again, compliments to the division. All eyes are focused on it.
Speaker Change: but got $500,000 left, so we're adding back $500,000 there. And then the reduction in the performance-based compensation, $1.8 million. He added up at about $143.4 million.
Speaker Change: which, you know, at the low end of what I previously guided, 144 to 146. So again, compliments to the division.
Ron Cofer: That being said, you know, there still is very much inflationary pressure as a multi-year contract comes up for renewal, headwinds in that regard. With that in mind, the guide for Q3 is 145 to 147. And the reason for that is we're going to have some... Picking up the six branches, if you will, even though they'll still be branch consolidation, there'll be more units, but we'll have some additional non-interest expense coming from that business combination. But then we're continuing to invest in our control functions, and so it's just important we keep that up. So again, repeating 145 to 147 for Q3.
Speaker Change: All eyes are focused on it. That being said, you know, there still is very much inflationary pressure as multi-year contracts come for renewal. Just.
Speaker Change: headwinds in that regard. With that in mind, the guide for Q3 is 145 to 147. And the reason for that, we're going to have some...
Speaker Change: picking up the six branches, if you will, even though there'll still be branch consolidation, you know, there'll be more units, but we'll have some additional non-interest expense.
Speaker Change: coming from that business combination, but then we're continuing to invest in our control functions. And so just important we keep that up. So again, repeating 145 to 147 for Q3.
Operator: A-and thank you. All right, take one moment for our next question. And our next question comes from Jeff Rulis from D.A. Davidson. Your line is now open.
Speaker Change: Okay, thank you.
Speaker Change: And thank you.
Speaker Change: And one moment for our next question.
Speaker Change: And our next question comes from Jeff Rulis from D.A. Davidson. Your line is now open.
Byron Pollen: Byron, I just wanted to go back to the margin. So to get the three, likely got a double the sequential increase of the second quarter. I just want to make sure that that's the case, you see an acceleration of margin from the Q2 jump-off point, is that right? Yeah.
Speaker Change: Thanks. Good morning. Morning, Jeff.
Byron: Byron, I just wanted to go back to the margin. So to get to three...
Jeff Rulis: like we got a double the sequential increase of the second quarter. I just want to make sure that that's
Speaker Change: that's the case you see an acceleration of of margin from
Byron Pollen: Yeah, we do see some acceleration here. I don't know if doubling is the right way to think about it, but we do see some acceleration in the third quarter and some momentum carrying into the fourth quarter as well.
Jeff Rulis: from the Q2 jump off point, is that right?
Speaker Change: Yeah, we do see some acceleration here. I don't know if doubling is the right way to think about it, but we do see some acceleration in the third quarter and some momentum carrying into the fourth quarter as well.
Jeff Rulis: Okay, and do you have the exit? Margin, or maybe the June average?
Speaker Change: Okay, and do you have the exit?
Byron Pollen: I have the June margin was $2.70 for the month of June.
Speaker Change: margin or maybe the June average.
Speaker Change: I have the the June margin was 270 for the month of June .
Jeff Rulis: Great. Thank you. So I wanted to hop over to the fee income side. I thought that was a pretty impressive quarter for them. As Randy said, service charge, miscellaneous fees, gain on sale, up. Maybe not. I'd be interested in your thoughts about the sustainability of that growth rate or is that sort of a leg up from a full quarter of Wheatland trying to unpack or maybe some seasonal tailwinds. Anyway, just checking in on that growth rate to see the comfortability of that going forward.
Speaker Change: Great. Thank you.
Speaker Change: So I wanted to hop over to the the income side. I thought that was a pretty impressive quarter with
Speaker Change: As Randy said, service charge, miscellaneous fees, gain on sale, up.
Speaker Change: Maybe not.
Speaker Change: Interested in your thoughts about the sustainability of that growth rate or is that sort of a leg up from a full quarter of Wheatland trying to unpack or is it maybe some seasonal tailwinds?
Speaker Change: Anyway just checking in on that growth rate and see the comfortability of that going forward.
Ron Cofer: Yeah, is Ron here? Yeah, I would say it's sustainable, you know, tourism is still very active in our communities. You know, service charges, new accounts, we continue to be very focused on opening checking accounts, all of that is positive. Just a point of reference, you know, the gain on sale, that, you know, I think we'll just be flat there, but overall, pretty positive.
Speaker Change: Yeah, Ron here. Yeah, I would say it's sustainable, you know, tourism still very active for our communities, you know, service charges, new accounts, you know, we continue to be very focused on opening.
Speaker Change: Checking accounts, all of that is a positive. Just a point of reference, you know, the gain on sale, that, you know, I think will just be flat there, but overall pretty positive.
Jeff Rulis: Okay, and Ron would expect seasonality there, so it sounds like Q3 pretty strong and robust, but maybe yes. We get into Q4, and the first quarter, maybe, softens up a bit or exactly as you would expect. Okay. And one other one, just to kind of touch on the...
Speaker Change: Okay and Ron would expect seasonality there. So it sounds like Q3 pretty strong and robust but maybe as we get into Q4 and first quarter maybe
Speaker Change: softens up a bit or... Exactly, as you would expect.
Speaker Change: Okay.
Speaker Change: And one other one just to kind of touch on the
Jeff Rulis: The loan balances, you know, a decline in the construction segment, my guess is that's kind of finished projects and I guess more interested in the go forward, you know, is that pipeline filling up? What would be the outlook for the second half for growth? You've been pretty consistent in the low to mid single digits, but wanted to see if that's changed at all what you're seeing into the second half. Yeah.
Speaker Change: That the loan balances, you know, a decline in in the construction segment, my guess is
Speaker Change: That's kind of finished projects and I guess more interested in
Speaker Change: to go forward, is that pipeline refilling? What would be the outlook on the second half for growth? You've been pretty consistent in the low to mid single digit, but wanted to see if that's changed at all what you're seeing into the second half.
Tom Dolan: Yeah, Jeff, it's Tom. I don't see that changing. Low to mid-single digits is where we think we're going to carry through the end of the year, and you know, just like you're discussing with Ron, there's some seasonality effect there, too, so I would expect third quarter maybe, you know, show some, maybe a little bit of additional strength, and then, you know, fourth quarter, once we have the ag production loans start to pay back at the end of And then your question on construction, the migration out of construction into perm, that's exactly right. That's what we saw in the second quarter.
Speaker Change: Yeah, Jeff, it's Tom. I don't see that changing, low to mid-single-digits.
Speaker Change: where we think we're going to carry through the end of the year and, you know, just like you're discussing with Ron, you know, there's some seasonality effect there too, so.
Speaker Change: I would expect third quarter maybe, you know, show some, maybe a little bit of an additional strength and then, you know, fourth quarter, you know, once we have the ag production loans start to pay back at the end of their growing cycle, that's usually a headline.
Tom Dolan: In terms of pipeline overall, you know, we really saw some nice lift in the pipeline in the first quarter, and that lift has remained constant throughout the second quarter. But in terms of the types of deals that comprise that pipeline, probably a little bit less so on the construction and development side. So, you know, at this point, we're not replacing the construction and development loans as fast as they're moving over to the firm side.
Speaker Change: And then your question on the construction, the migration out of construction into permits, that's exactly right, that's what we saw in the second quarter. In terms of pipeline overall, you know, we really saw some nice lift in the pipeline in the first quarter, that lift has remained constant.
Speaker Change: throughout the second quarter, but in terms of the types of deals that comprise that pipeline, probably a little bit less so on the construction and development side.
Speaker Change: So, you know, at this point, you know, we're not replacing the construction and development loans as fast as they're moving over to the firm side.
Jeff Rulis: Okay. I appreciate it, Tom. Thank you.
Operator: And thank you. And one moment for our next question. And our next question comes from David Feaster from Raymond James. Your line is now open.
Speaker Change: Okay. Appreciate it, Tom. Thank you. And thank you. And one moment for our next question.
Speaker Change: And our next question comes from David Feaster from Raymond James. Your line is now open.
David Feaster: Hi, good morning everybody. Good morning, David.
David Feaster: I wanted to maybe touch on your thoughts on the earning asset side and somewhat of the mix. It seems like you're going to have enough securities cash flows to fund loan growth with potential for excess, especially with any type of core deposit growth, as we kind of go into a seasonally stronger period. I'm curious how you think about plans for if you do have any excess liquidity. Would you opt to reduce borrowings or let non-core funding runoff or reinvest into shorter duration securities and kind of maintain the earning asset size? Just kind of curious about anything about size and balance sheet going forward in the mix.
Speaker Change: Hi, good morning everybody. Morning, David.
David Feaster: I wanted to maybe touch on your thoughts on the earning asset side and somewhat kind of the mix. It seems like you're going to have enough securities cash flows to fund loan growth with potential for excess, especially with any type of core deposit growth.
Speaker Change: as we kind of go into a seasonally stronger period.
Speaker Change: I'm curious how you think about plans for if you do have any excess liquidity. Would you opt to reduce borrowings or let non-core funding run off or reinvest into shorter duration securities and kind of maintain the earning asset size? Just kind of curious how you think about the size of the balance sheet going forward and the mix.
Byron Pollen: In terms of the mix, if we do have any excess liquidity that builds on the balance sheet, I think our first thing to do would be to chip away at our wholesale funding balance. We do have some overnight FHLB advances, and we'll chip away at those borrowings.
Speaker Change: Yeah, in terms of the mix, you know, if we do have any excess liquidity that builds on the balance sheet, you know, I think our first thing to do would be to chip away at our wholesale funding balance. So we do have some overnight FHLB advances and we'll chip away at those borrowings.
Byron Pollen: In terms of the overall size, I do think, and let's first of all set aside M&A and the Rocky deal that's closing today, from an organic perspective, I do see a fairly stable balance sheet, you know, through the end of the year. Now to that, we would add the incremental loans that we're getting from the Rocky transaction. So I would say overall, stable plus Rocky is how I would think about our balance sheet.
Speaker Change: In terms of the overall size, I do think, and let's first of all set aside M&A and the Rocky deal that's closing today.
Speaker Change: From an organic perspective, I do see a fairly stable balance sheet.
Speaker Change: you know, from, you know, through the end of the year.
Speaker Change: Now, to that, we would add the incremental loans that we're getting from the Rocky transaction. So I would say overall, stable plus Rocky is how I would think about our balance sheet for the rest of the year.
David Feaster: That's helpful. And then maybe I want to switch to the deposit side. Obviously, a seasonally tougher quarter, right? Given tax payments early in the quarter. And that makes, honestly, the NID growth you saw a bit even more impressive. Also, maybe you could walk through some of the trends that you saw from a core deposit perspective throughout the quarter and into early July. And just general expectations.
Speaker Change: Okay, that's helpful.
Speaker Change: And then maybe I want to switch to the deposit side. Obviously, it's usually tougher quarter, right? Just given tax payments early in the quarter.
Speaker Change: and that makes, honestly, the NIB growth you saw a bit even more impressive. Also, maybe you could walk through some of the trends that you saw from a core deposit perspective throughout the quarter and into early July and just general expectations for core deposit growth going forward and how pricing's trending.
Byron Pollen: Sure. Yeah, if you look at, you know, kind of our flows throughout the quarter, you're exactly right. It was driven by April tax payments. So when we look at our total deposits, we had an outflow in April, and if you put May and June together, a slight increase, but it wasn't enough to overcome the April outflow. So it really was, you know, kind of a tax-based story there.
Speaker Change: Sure.
Speaker Change: Yeah, if you look at, you know, kind of our flows throughout the quarter, you're exactly right, it was driven by April tax payment.
Speaker Change: So, when we look at our total deposits, we had an outflow in April , and if you put May and June together, a slight increase, it wasn't enough to overcome the April outflow. So, it really was kind of a tax-based story there. I would say the non-interest sparing was really encouraging. We did see outflow in April . We saw growth. I'm sorry. Thank you. Bye-bye.
Byron Pollen: I would say the non-interest sparing was really encouraging. We did see outflows in April, but we also saw growth. I'm sorry.
Byron Pollen: Yeah, so outflow in April, growth in May, and And you know, that growth in the non-interest bearing is really encouraging. That does go a long way towards helping us with that cost stabilization that we talked about a little bit earlier. You know, the industry is facing headwinds on the deposit front, and we're no different. But at the same time, this is kind of seasonally when we see some strength. And so when you put our, you know, historical seasonal strength up against some of the industry headwinds, I do think we'll see some growth, I would say, in terms of the third quarter balance outlook, a little bit higher. And if we look beyond into the fourth quarter, probably flat from there. But that's overall how I see it, you know, the.
Speaker Change: Yeah, so outflow in April , growth in May and June .
Speaker Change: you know, that growth in the non-interest bearing is really encouraging. That does go a long way towards helping us with that cost stabilization that we talked about a little bit earlier. You know, the industry is facing headwinds on the deposit front, and we're no different.
Speaker Change: At the same time, this is kind of seasonally, we see some strength.
Speaker Change: And so when you put our, you know, historical seasonal strength up against some of the industry headwinds, I do think we'll see some growth, I would say.
Speaker Change: in terms of the third quarter balance outlook, you know, a little bit up. And if we look beyond in the fourth quarter, probably flat, flat from there. But that's that's overall how I see, you know, our our our deposits through the rest of the year.
David Feaster: Okay, that's helpful. And then just last one for me, a curious kind of what you're seeing on the M&A front. Obviously, you're an acquirer of choice across your footprint. You know, you've got this branch acquisition closing now, but I'm curious about your thoughts on maybe the pace and pulse of the conversations you're having and expectations for consolidation in the near term, and your appetite to participate in that. And if you're still expecting to focus kind of on that sub 1 billion asset-size deal, or if you've got any interest in larger transactions, just given the increased scale.
Speaker Change: Okay, that's helpful.
Speaker Change: And then, just last one for me, curious kind of what you're seeing on the M&A front. Obviously, you're an acquirer of choice across your footprint. You know, you've got this branch acquisition closing now, but I'm curious.
Speaker Change: Your thoughts on maybe the pace and pulse of the conversations you're having and expectations for consolidation near-term, your appetite to participate in that.
Speaker Change: and if you're still expecting to focus kind of on that sub $1 billion asset size deal or if you've got any interest in larger transactions just given the increased scale.
Randy Chesla: Yeah, the number one thing we're happy to have Wheatland done converted and doing really, really well at the beginning of the year. And now the Heartland branch acquisition, which will close at the end of today and convert over the weekend, given it's a branch acquisition. In terms of the, you know, the pace going forward, you know, we've recently seen the run-up and repositioning or the increase in bank, general bank stocks will have an issue.
Speaker Change: Yeah, the so number one we're you know
Speaker Change: Happy to have Wheatland done, converted, and doing really, really well at the beginning of the year, and now the Heartland branch acquisition, which we'll close at the end of today and convert over the weekend, given it's a branch acquisition. In terms of the, you know, the pace...
Speaker Change: Going forward, you know, we've recently we'll see the run-up in Repositioning or the increase in bank general bank stocks will have an issue but prior to that
Randy Chesla: But prior to that, I'd say, you know, still moderate activity; we're having a number of discussions. And so I would expect if the stock price increase holds for regional midsize banks, you'll see more, you'll see an increase there; more people can do a deal. We could pencil a deal out prior, given the strength of our currency, but now more, more people can do that. So I probably expect to see activity pick up.
Speaker Change: I'd say, you know, still moderate activity. We're having a number of discussions. And so...
Speaker Change: I would expect if the stock price increase holds for regional mid-sized banks, you'll see an increase there. More people can do a deal. We could pencil a deal out prior.
Speaker Change: given the strength of our currency, but now more more people can can do that so
Randy Chesla: And in terms of scale, our targets really haven't changed. I mean, we'll look at things from a little under a billion to four or five plus billion, just depending on what might be available. And if it's strategic to us, and again, you know, I think the key there is that we get a lot of calls, we get a lot of looks, it's to stay very, very disciplined on where we want to be and the type of banks that we want to buy.
Speaker Change: probably expect to see activity pick up. And in terms of scale, our targets...
Speaker Change: really hasn't changed. I mean we you know we'll look at things from a little under a billion to four or five plus billion just depending on what might be available and if it's strategic to us and again
Speaker Change: I think the key there is to, we get a lot of calls, we get a lot of looks, it's to stay very, very disciplined on where we want to be and the type of banks that we want to buy.
David Feaster: That makes sense. Thanks, everybody.
Operator: And thank you. And one moment for our next question. And our next question comes from Kelly Mota from KBW. Your line is now open.
Speaker Change: Makes sense. Thanks, everybody.
Speaker Change: And thank you. And one moment for our next question.
Speaker Change: And our next question comes from Kelly Moda from KBW. Your line is now open.
Kelly Mota: Hi, good morning. I wanted to circle back to expenses. I appreciate the color of the moving parts of the quarter and the Q3 outlook. It sounded from your remarks around that there are some inflationary headwinds still. Can you remind us what cost fades are left from Wheatland, as well as how you should expect the Heartland Branch acquisition cost fades to flow through? And is it fair to say that that range is probably still good to carry forward, at least for the next couple quarters? Just wondering the puts and takes as we look ahead from that, understanding you might have some cost fades there.
Speaker Change: Hi, good morning. Morning, Kelly.
Speaker Change: I wanted to circle back to expenses.
Speaker Change: I appreciate the color of the moving parts of the quarter.
Kelly Moda: The Q3 outlook. It sounded like from from your remarks around that that there's some inflationary headwinds still Um, can you remind us what what cost states are left from?
Speaker Change: Wheatland, as well as how you should expect the Heartland Branch Acquisition Clause to flow through. And is it fair to say that, you know, net-net
Speaker Change: That range is probably so good to carry forward at least for the next couple quarters or Just wondering kind of the puts and takes as we look ahead from that Understanding you might have some cost saved there
Ron Cofer: Yeah, so let me start with Wheatland and basically repeating what I said in the earlier call back in April, we'll see the cost phase. Remember, 20% in 2024 and so. 50% in 2024.
Speaker Change: Yeah, so let me let me start with Leland and basically repeating what I said in the earlier call back in April , we'll see the cost phase. Remember 20% in 2024 and so.
Ron Cofer: So we'll see $2 million and show up in Q2, Q3, and Q4. You know, there wasn't much cost savings when we added them right away, but, you know, again, doing very, very well with that. So that would speak to Wheatland.
Speaker Change: excuse me, 50% in 2024. So we'll see $2 million and show up in Q2, Q3, and Q4. You know, there wasn't much cost saved when we added them right away, but you know, it's
Ron Cofer: No change there in the bottom line. Then, with the Rocky Mountain Bank acquisition, you know, we're pensing in 38% cost savings, but, you know, 50% of that can come in 2024, but I only have five months to get it, so it's about 8% of what we will pick up in non-interest expense. So, taking that into account, estimating in Q3, we'll see about $1.3 million of pickup in non-interest expense from that, and then in Q3, $1.7 million, a total of $3 million combined.
Speaker Change: Again, doing very, very well with that. So that would speak to Wheatland. No change there is the bottom line. Then with the Rocky Mountain Bank acquisition, we're penciling in 38% cost saves, but, you know.
Speaker Change: 50% of that can come in 2024, but I only got 5 months to get it, so it's about 8%.
Speaker Change: what we will pick up in non-interest expense.
Speaker Change: So, taking that into account, estimating in...
Speaker Change: Q3, we'll see about 1.
Speaker Change: $3 million of pickup in non-intended expense from that, and then in Q3, $1.7 million, a total of $3 million combined in the next two quarters.
Ron Cofer: And just to point out, you know, we have branch consolidation, so we'll have some branches for sale, but I have not factored in any gains or losses. I'm not expecting any losses, I can assure you of that. But none of my guide 145 to 147 includes any games on any of the branches that will be put up for sale, say, in a couple of months. That may take a while.
Speaker Change: And just to want to point out, you know, we have branch consolidation, so
Speaker Change: We'll have some branches for sale, but I have not factored in any gains or losses. I'm not expecting any losses, I can assure you that. But no, none of my guide 145 to 147 includes any
Speaker Change: on any of the branches that'll be put up for sale, say in a couple of months. That may take a while.
Kelly Mota: Got it. That's super helpful. And as we look ahead, assuming we get, you know, some rate cuts either later this year or next, just wondering if there's any change in how you're anticipating deposit costs to react to that. You guys have obviously done a good job managing those on the way up. But I'm just curious, it's encouraging to see some of that cost moderating, just curious what you're.., you know, expecting with that.
Speaker Change: Got it. That's super helpful. And as we look ahead, assuming we get
Speaker Change: some rate cuts either later this year or next. Just wondering if there's any change in how you're anticipating deposit costs to react on that. You guys have obviously done a good job managing those.
Speaker Change: On the way up. But I'm just curious. It's encouraging to see some of that cost moderating just curious what you're
Ron Cofer: Yeah, relative to any kind of rate reduction, I think we're pretty cautious about expecting that those are going to transfer right to the customers. So we have pretty conservative assumptions built into our expectations around that. Kelly, I know that if you talk to different banks, they have different expectations about how much of that they can pass on to their customers right away. And I guess our view is, you know, it's been a long way up to this point, and that, you know, it's going to take a while to move off, given the rates and the certainty that people feel like those are going to continue.
Speaker Change: you know, expecting with that.
Speaker Change: Yeah, relative to any kind of rate reductions, I think we're pretty cautious on expecting that those are going to transfer right to the customers.
Speaker Change: So we have pretty conservative assumptions built into our expectations around that, Kelly. I know that if you talk to different banks, they have different expectations about how much of that they can pass on to their customers right away.
Speaker Change: And I guess our view is, you know, it's been a long way up to this point, and that, you know, it's going to take a while to move off, given the rates and the certainty that people feel like those are going to continue.
Kelly Mota: Got it. That's helpful. Maybe last for me, with the deposits you're picking up, do you have any idea what the incremental cost of that funding is? Yeah, Kelly, give me the numbers.
Kelly Moda: Got it. That's helpful. Maybe last for me, with the deposits you're picking up, do you have what the incremental cost of that funding is?
Ron Cofer: Yeah, Kelly, give me just a second here. The deposits are coming over, you know, the nominal amount with what they're charging. Let me find it here. One second. Hey, Kelly, let me get back to that. I Oh, here it is.
Kelly Moda: Yeah, Kelly, give me just a second here. The.
Kelly Moda: The deposits are coming over the nominal amount with what they're charging. Let me find it here.
Kelly Moda: One second.
Ron Cofer: It's 1.65% is what is coming over at. And so again, they have had to do so in order to retain deposits because that's the premium that, you know, they'll receive. They've had to backfill with CDs in particular. And, as well, you've seen a rate increase because when I guided them in the last quarter, they were at 159. Now they're at 164, so I think they've done a good job of retaining deposits. You're talking about the Rocky? The Rocky, yeah, this is Rocky, yeah.
Kelly Moda: Hey, Kelly, let me get back to that.
Kelly Moda: Oh, here it is. It's 1.65% is what it's coming over at. And so that, again...
Kelly Moda: They have had to in order to retain deposits because that's the
Speaker Change: premium that they'll receive. They've had to backfill with CDs in particular and as well you've seen a rate increase because when I guided in the last quarter they were at $159 now they're at $164. So I think they've done a good job to retain deposits.
Kelly Mota: Got it. Thank you.
Speaker Change: You're talking about the Rocky? Yeah, this is Rocky, yeah.
Operator: And thank you. And if you'd like to ask a question, that is star 11. Again, if you'd like to ask a question, that is star 11. And one moment for our next question. And our next question comes from Brandon King from Truist. Your line is now open.
Speaker Change: Got it. Thank you.
Speaker Change: And thank you. And if you'd like to ask a question, that is star 11. Again, if you'd like to ask a question, that is star 11. And one moment for our next question.
Speaker Change: And our next question comes from Brandon King from Truist. Your line is now open.
Brandon King: So, as I understand it, are you expecting to hit that 3% interest margin with the balance sheet, I guess, flattest from these levels, and if so, including?
Brandon King: Hey, good morning.
Speaker Change: Morning, Brandon.
Brandon King: So, as I understand, are you expecting to hit that 3% net interest margin with the balance sheet, I guess, flat-ish from these levels, and is that including the Heartland branches?
Byron Pollen: That does include the heartland branches. And when I say flat, that's organic without the Rocky, so there would be some growth coming from the acquisition of the Rocky.
Speaker Change: That does include the heart and braces. And when I say flat, that's organic without.
Speaker Change: Rocky, so there would be some growth coming from the acquisition of the Rocky Loan.
Brandon King: Okay, okay. And then, could you help me reconcile... I guess the movement in average taxable debt securities was a pretty meaningful drop on an average basis, and also, the cash income dropped to $2 million from $15 million. So just, could you help me reconcile that, is there anything to call out there?
Speaker Change: Okay. Okay.
Speaker Change: And then, could you help me reconcile...
Speaker Change: I guess the movement in average taxable debt securities, you know, it was a pretty meaningful drop on an average basis and also the cash income dropped to two million from 15 million. So just could you help me reconcile that? Is there anything to call out there?
Byron Pollen: Sure. I think when we were looking at the change in the AEA, we have to go back to the first quarter and talk about the BTFP balances that we had. So we did pay down BTFP balances, and that happened very late in the quarter. And so, you know, somewhere around March 20th, we paid off the BTFP, and we replaced that with FHLB advances, but at a lesser amount. And because that happened very late in the quarter, it didn't influence the Q1 average that much.
Speaker Change: Sure, I think when we were looking at the change in the AEA, we have to go back to the first quarter and talk about the BTFP balances that we had. So we did pay down BTFP balances, and that happened very late in the quarter.
Speaker Change: And so, you know, somewhere around, you know, March 20th that we paid off the BTFP and we replaced that with FHLB Advances, but at a lesser amount. And so, as Randy mentioned, we took some of the excess cash that we had on the balance sheet.
Speaker Change: and we paid down wholesale funding, and so we put...
Speaker Change: With the amount of BTFT that we paid off, we didn't replace it with as much as HLB advances.
Byron Pollen: But of course, it did influence the Q2 average because that was all done by the time we got to, you know, April 1st. So I think that's what you're seeing with the change in the averages from Q1 to Q2.
Randy Chesler: and because that happened very late in the quarter, it didn't influence the Q1 average.
Speaker Change: that much, but of course, it did influence the Q2 average because that was all done by the time we got to April 1st. So I think that's what you're seeing with the change in the averages from Q1 to Q2.
Brandon King: Okay, so I guess that cash interest should continue to be kind of running. I guess maybe a little higher than $2 million. Is that... Thank you.
Speaker Change: Okay, so I guess that cash interest should continue to be kind of running.
Byron Pollen: Cash will fluctuate day to day as we manage inflows and outflows of loans and deposits, etc. But when we look at the Q2 average for cash, it should be fairly consistent in Q3 and Q4. That's kind of the stable to flat comment that I made earlier.
Speaker Change: I guess maybe a little higher than 2 million, is that...
Speaker Change: Thank you. Bye.
Speaker Change: And cash will fluctuate, you know, day-to-day as we manage, you know, inflows and outflows of loans and deposits, you know, etc.
Speaker Change: But when we look at the Q2 average for cash, it should be fairly consistent in Q3 and Q4. That's kind of the stable to flat, you know, comment that I made earlier.
Operator: And thank you, and one moment for our next question. And our next question comes from Andrew Terrell from Stevens. Your line is now open.
Speaker Change: Okay. Thanks for taking my questions.
Speaker Change: And thank you. And one moment for our next question.
Speaker Change: And our next question comes from Andrew Terrell from Stevens. Your line is now open.
Andrew Terrell: I had a question around the most recent disclosure I saw in the queue on kind of the swap positions that you guys have was about a billion five of swaps kind of against the bond portfolio that I think were added late last year. So I guess the question is one whether any incremental swaps have been added this quarter and then do you have the benefit that you saw from the swaps realized in 2Q and then, more broadly, can you talk about your hedging or derivative strategy?
Speaker Change: Hey, good morning. Morning, Andrew.
Andrew Terrell: I had a question around the most recent disclosure I saw in the queue on kind of the swap positions that you guys have was about a billion five of swaps kind of against the bond portfolio that
Speaker Change #101: I think we're at a late last year. So I guess the question is, one, any incremental swaps added this quarter? And then do you have the benefit that you saw from the swaps realized in 2Q? And then just more broadly, could you talk about kind of
Speaker Change #101: your hedging or derivative strategy.
Byron Pollen: We did put on $1.5 billion in swaps in Q4. We haven't done anything new since then, and so overall, one of the things that we're looking at is how we're positioned from a liability-sensitive balance sheet; we're looking at the market expectations for potential rate cuts, are we at a potential inflection point in terms of the front end of the curve, at least, and so we're looking at, you know, our projections for, you know, growth in loans and From an interest rate risk perspective, you know, we haven't put on any additional swaps and don't have any plans in the near term to add any new swaps to the
Speaker Change #102: Sure yeah we did put on we did put on a billion five and in swaps in q4
Speaker Change #102: We haven't done anything new since then and and so just overall one of the things that we're looking at is how we're positioned.
Speaker Change #103: from a liability sensitive balance sheet. We're looking at the market expectations for potential rate cuts, you know, are we.
Speaker Change #103: at a potential inflection point in terms of the front end of the curve, at least. And so we're looking at, you know, our projections for, you know,
Speaker Change #103: growth in loans and deposits, the acquisition that's coming on from Rocky Mountain, all of those things kind of pulling that together.
Speaker Change #103: From an interest rate risk perspective you know we haven't put on any additional swaps and don't have any plans in the near term to add any new swaps to the
Andrew Terrell: Okay, I appreciate it. And if I could ask a couple more around the deposits coming over with the branch acquisition. I think you said $403 million. If I recall, I think last quarter we talked about $460 million or so. One, just curious, anything kind of specific driving the decline sequentially in those deposits, or is it just kind of more broadly deposit pressure that we're kind of seeing across the industry? And then also, if you had the non-interest bearing split of the acquired deposits, would it be helpful?
Speaker Change #103: to the book.
Speaker Change #104: Okay, I appreciate it. And if I could ask a couple more around the...
Speaker Change #105: The deposits coming over with the branch acquisition, I think you said 403 million. If I recall, I think last quarter, we talked about like 460 million or so.
Speaker Change #106: One, just curious, anything kind of specific driving the decline sequentially in those deposits? Or is it just kind of more broadly the deposit pressure that we're kind of seeing across the industry? And then also, if you have the...
Randy Chesla: Sure. What's going on there is some of what's going on in the industry, just some headwinds on deposits and also some sorting out. So we worked with Heartland and the other buyer of the branches. We probably started off with a gross number and, I think, ended up with a net one. There were some customers that we sorted through that were actually being banked at some of the other branches, and so we sorted those out as well.
Speaker Change #107: the non-interest-bearing split of the acquired deposits. It would be helpful.
Speaker Change #108: Sure, you know what's going on there is some of what's going on in the industry just some headwinds on deposits and also some sorting out so we work with Heartland and the other buyer of the
Speaker Change #109: branches. We probably started off with a gross number and I think ended up with a net one. There was some customers...
Speaker Change #109: that we sorted through that were actually being banked at some of the other branches. And so we sorted those out as well. So once we finished that plus kind of normal runoff, as you would expect.
Randy Chesla: So once we finished that plus kind of normal runoff, as you would expect, branch sale. Maybe a little accelerated runoff. That's why we're, you know, happy to close it today and turn it into a hotel this weekend. I think we'll get our arms around that, but a little of both. Andrew, it was both industry headwinds and then what I would call sorting between the branches of what relationships and deposit accounts went where, and we sorted out a few that went with the other purchaser of the remaining Rocky branches in Montana.
Speaker Change #109: branch sale, maybe a little accelerator runoff.
Speaker Change #109: And that's why we're, you know, we're happy to close it today and convert it this weekend. I think we'll get our arms around that, but a little of both.
Speaker Change #109: Andrew, it was both the industry headwinds and then what I would call sorting between the branches of what relationships and deposit accounts go where, and we sorted out a few that went with the other purchaser of the remaining Rocky branches in Montana.
Andrew Terrell: Presumably, post that, if this is more of a net versus the gross number you would feel better about your expectations around any deposit attrition post the acquisition close, is that fair?
Speaker Change #110: Presumably, post that, if this is more of a net versus the gross number you would feel better about, your expectations around any deposit attrition post the acquisition close, is that fair?
Randy Chesla: Yes, I think now that we close it, the behavior will be much similar to the Glacier Bancorp behavior that we've seen.
Speaker Change #111: Yes, yeah, I think now that we close it, the behavior will be much similar to the Glacier Bancorp behavior that we've seen.
Andrew Terrell: Yep, okay. And then do you have the non-interest bearing split?
Ron Cofer: Yeah, Ron here. It's 31%. It fluctuates a little bit, but they're pretty good at gathering deposits.
Speaker Change #112: Yep, okay. And then do you have the non-interest bearing split?
Speaker Change #112: Yeah, Ron here. It's 31%. It fluctuates a little bit, but they're pretty good at gathering deposits.
Andrew Terrell: Yeah, OK, so pretty in line. OK, thank you for taking the questions.
Speaker Change #113: Yeah, okay, so pretty in line. Okay, thank you for taking the questions.
Operator: You're welcome. And thank you. And I'm showing no further questions. I would now like to turn the call back over to Randy for closing remarks.
Speaker Change #114: You're welcome. And thank you.
Speaker Change #114: And I'm showing no further questions. I would now like to turn the call back over to Randy for closing remarks.
Randy Chesla: Right. Well, thank you, Justin. And we thank everybody for dialing in today. We really appreciate it. And we wish everyone a great Friday. Enjoy the summer, and, you know, reach out if there's any other questions that you have. Thank you for joining us today.
Randy Chesler: All right, well thank you Justin and we thank everybody for dialing in today. Really appreciate it and
Randy Chesler: We wish everyone a great Friday, enjoy the summer, and reach out if there's any other questions that you have. Thank you for joining us today.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change #115: This concludes today's conference call. Thank you for participating. You may now disconnect.